Scenario: A manufacturing company that focuses on residential windows and baseboards. The company is in the mid-western United States and has 135 employees in a single facility. This company has four categories of employees which are: Manufacturing, Warehousing, Administration, and Marketing. Despite the success and growth this company has several issues. if the issues are not addressed, It will severely impact the long-term success of the company. One of the issues that need to be addressed is the Pay Equity Issue. The company has expressed varying levels of job dissatisfaction which has led to decreased productivity and increasing costs. After interviewing employees and checking the company's HRIS data the first problem that exists is the company's internal alignment between the different jobs and how their pay is structured. This pay structure needs to be developed in such a way that it fairly rewards the employees for their individual contributions. The organization and employees should benefit from the organization's pay structure.

I am asked as a new HR Manager to address the following question:

1- Develop and describe a logical and defensible Pay Philosophy how is it derived (from the organizations strategy), what level of pay will you target, and will you have the same policy/target for all positions or differentiate, e.g., pay 60-75th percentile for our key positions, and 50th percentile for all other jobs.

2- Next, define your suggested pay philosophy, but first define what it is and why its important. Explain the pros and cons of the philosophy you recommend.